Hedge fund managers oversee the investments of their respective hedge funds. For hedge fund managers to be successful, they must create a competitive advantage, have a well-defined investment strategy, a high amount of capital, a robust marketing plan, and a strong risk management strategy. Those who become successful make a lot of money annually, like the five highest-paid hedge fund managers in 2023.
Combined, the top 25 hedge fund managers earned $21.5 billion in 2022. These are the top 5 highest-paid managers as of 2023.
Key Takeaways
- A hedge fund, which is an investment vehicle that aggregates capital from multiple investors, is normally run by professional management companies.
- Successful hedge fund managers tend to be highly paid and can be worth billions of dollars.
- In 2023, the five highest-paid hedge fund managers were Ken Griffin of Citadel, Izzy Englander of Millennium Management, Steve Cohen of Point72 Asset Management, David Tepper of Appaloosa Management, and James Simon of Renaissance Technologies.
Hedge Fund Overview
A hedge fund is an investment vehicle and business structure that aggregates capital from multiple investors and invests in securities and other investment instruments. Professional management companies structured as limited partnerships or limited liability companies normally run hedge funds.
Hedge funds differ from mutual funds in that regulators do not cap leverage, and most of the investments are highly liquid.
Ken Griffin
Ken Griffin, the founder of Chicago-based Citadel, has a history of making headlines for buying penthouses and mansions across the globe, purchasing art, and giving away millions of dollars to charity. His spending has been comfortably financed by strong performances from Citadel’s multi-strategy hedge funds.
In 2022, Citadel recorded the most profitable year ever for a hedge fund, with a return of 153%. Griffin's personal earnings were around $4.1 billion. By 2023, his estimated net worth had reached $35 billion. As of 2023, Citadel had over $57 billion in assets under management.
Israel "Izzy" Englander
Izzy Englander of Millennium Management is a 53-year Wall Street veteran and the second-highest-earning hedge fund manager. Millennium now manages over $58 billion in assets; Englander's fund gained 12.6% in 2022. His personal earnings from his work were $3.2 billion. His total net worth was estimated at $11.5 billion at the start of 2023.
Steven Cohen
Steven Cohen's firm, Point72 Asset Management, saw gains of 10.25% in 2022 and earned its investors profits of $2.4 billion. Cohen's earnings in 2022 were estimated at $1.9 billion. His total net worth was estimated at $17.5 billion in 2023. Point72 currently manages more than $27 billion in assets for its clients.
David Tepper
David Tepper's Florida-based Appaloosa Management earned investors a return of about 8.25% in 2022. At the beginning of 2023, Tepper's 2022 earnings were estimated at $1.2 billion. At $18.5 billion, estimated at the same time, his net worth is even higher than Cohen's. Appaloosa assets under management currently total over $14 billion.
James Simons
James Simons isthe founder ofthe highly regarded quantitative hedge fund firmRenaissance Technologies.His total hedge fund income was $1.1 billion in 2022. His total net worth is estimated at $28.1 billion.
Simons retired in 2010 but still has a say on howRenaissance is run and makes money from its fund’s performances. The performance of Renaissance’s oldest fund, Medallion, is unknown as it is only open to owners and employees at the company.
Who Is the Richest Hedge Fund Manager?
Ken Griffin of Citadel is both the richest hedge fund manager and the highest paid. In 2022, he earned $41. billion, and by the beginning of 2023 his net worth was estimated at $35 billion.
How Much Do Hedge Fund Managers Make?
The average salary for a hedge fund manager in the United States is $122,555 per year, with an estimated total pay of $199,035 annually. However, highly successful hedge fund managers can make millions every year, with the median earnings of hedge fund managers reaching $570 million in 2022. The top-earning hedge fund managers, like Ken Griffin and Izzy Englander, earn billions every year.
Why Do Hedge Fund Managers Earn So Much?
Hedge fund managers' earnings are usually based on management fees and a percentage of the profits they earn, known as a performance fee. The more assets they have under management, and the higher the profits they earn for their fund, the more income they make.
The Bottom Line
A hedge fund is an investment vehicle that aggregates capital from multiple investors. These funds are run by professional management companies. The most successful hedge fund managers handle billions of dollars in assets for their clients, and their earnings can reach into the billions as well.
In 2023, the highest-paid hedge fund manager was Ken Griffin of Citadel, who earned $4.1 billion. He was followed by Izzy Englander of Millennium Management, who earned $3.2. billion. The next three highest-paid managers were Steve Cohen of Point72 Asset Management, David Tepper of Appaloosa Management, and James Simon of Renaissance Technologies. Their earnings were all between $1 and $2 billion.
FAQs
Who Is the Richest Hedge Fund Manager? Ken Griffin of Citadel is both the richest hedge fund manager and the highest paid. In 2022, he earned $41. billion, and by the beginning of 2023 his net worth was estimated at $35 billion.
Who is the highest earning hedge fund managers in the world? ›
Who Is the Richest Hedge Fund Manager? Ken Griffin of Citadel is both the richest hedge fund manager and the highest paid. In 2022, he earned $41. billion, and by the beginning of 2023 his net worth was estimated at $35 billion.
Who is the rich hedge fund guy? ›
Kenneth Cordele Griffin (born October 15, 1968) is an American hedge fund manager, entrepreneur and investor. He is the founder, chief executive officer, co-chief investment officer, and 80% owner of Citadel LLC, a multinational hedge fund.
Who is the most profitable hedge fund? ›
One of the most profitable hedge funds of all times, Citadel generated $16 billion in profits for its investors in 2022, and earned $65.9 billion in net gains since 1990, making it the top-earning hedge fund ever.
Who is the best hedge fund manager of all time? ›
- Warren Buffett. Bloomberg via Getty Images. ...
- George Soros. The Hungarian-born magnate is the chairman of Soros Fund Management and founder of Quantum Fund. ...
- Ray Dalio. ...
- John Paulson. ...
- Seth Klarman. ...
- David Tepper. ...
- Steve Cohen. ...
- Andreas Halvorsen.
Here are the 20 richest hedge fund managers on Forbes' 2023 World's Billionaires list:
- #1. Ken Griffin. Net worth: $35 billion. ...
- #2. Jim Simons. Net worth: $28.1 billion. ...
- #3. Ray Dalio. Net worth: $19.1 billion. ...
- #4. David Tepper. Net worth: $18.5 billion. ...
- #5. Steve Cohen. ...
- #6. Carl Icahn. ...
- #7. Michael Platt. ...
- #8. Israel Englander.
The top individual Portfolio Managers can earn hundreds of millions or billions each year. Hedge funds offer a much higher pay ceiling than investment banking, (sometimes) better hours and work/life balance, and the chance to do more interesting work.
How much does a CEO of a hedge fund make? ›
What is the average salary for a Chief Executive Officer at Hedge Fund Group in the United States? Based on our data, it appears that the optimal compensation range for a Chief Executive Officer at Hedge Fund Group is between $508,173 and $841,009, with an average salary of $665,862.
Who owns the biggest hedge fund in the world? ›
Bridgewater Associates, a global investing force, had $168 billion under management at its peak in 2022, making it not just the world's largest hedge fund, but also more than twice the size of the runner-up.
Why are hedge fund managers so rich? ›
Hedge fund managers typically earn above-average compensation, often from a two-and-twenty fee structure. Hedge fund managers typically specialize in a particular investment strategy that they then use to power their fund portfolio's mandate for profits.
Citadel LLC is one of the largest hedge funds based in the U.S., with approximately $92.46 billion in total assets under management as of Sept. 30, 2023. Citadel has generated roughly $74 billion in total gains since its inception in 1990, making it the most successful hedge fund of all time.
What is the richest investment company in the world? ›
BlackRock, Inc. is an American multinational investment company. It is the world's largest asset manager, with $10 trillion in assets under management as of December 31, 2023. Headquartered in New York City, BlackRock has 78 offices in 38 countries, and clients in 100 countries.
What is the highest position in a hedge fund? ›
Depending on the size of the hedge fund company, the portfolio manager might be the person at the top or one of several. Their job is to create the overall strategy for their assets under management (the money invested in the fund).
What is the highest paid hedge fund? ›
Kenneth Griffin
Citadel has now made $74 billion for investors since its inception in 1990, more than any other hedge fund firm.
Who is the legendary hedge fund manager? ›
George Soros founded his first hedge fund, Double Eagle, in 1969. With profits from this fund, he started Soros Fund Management, in 1973. 4 Eventually, Double Eagle was renamed the Quantum Fund, and it became the primary hedge fund that Soros advised.
What degree do most hedge fund managers have? ›
Hedge fund managers often have a master's degree or even a Ph. D. in finance, mathematics, economics, financial engineering, quantitative finance, programming, marketing, or business administration. Others have advanced degrees in a specialty such as engineering or accounting.
How much does a hedge fund CEO make? ›
What is the average salary for a Chief Executive Officer at Hedge Fund Group in the United States? Based on our data, it appears that the optimal compensation range for a Chief Executive Officer at Hedge Fund Group is between $508,173 and $841,009, with an average salary of $665,862.
Who is the best hedge fund in the world return? ›
Billionaire Christopher Hohn's TCI led the annual ranking by 2023 returns, which were $12.9 billion after fees, while Citadel, Millennium Management and D. E. Shaw, all multi-strategy firms, were the top three hedge funds by lifetime gains.
How do hedge fund managers get so rich? ›
Hedge fund managers typically earn above-average compensation, often from a two-and-twenty fee structure. Hedge fund managers typically specialize in a particular investment strategy that they then use to power their fund portfolio's mandate for profits.
